Lockheed Martin 2007 Annual Report Download - page 42

budget proposal also assumes Congress will approve the full $183.8 billion in supplemental funding requested for fiscal year
2008, of which only $86.8 billion had been approved at the time of the budget submission. Total funding requested for the
fiscal year 2009 base and supplemental budgets is $585.4 billion.
Details of the supplemental funding request have not yet been released. Supplemental funding enables the DoD to
proceed on critical modernization and acquisition programs, versus using funds available for those programs to pay for the
Iraq and Afghanistan missions. While Congress has expressed concern about the size of supplemental budgets, funding for
ongoing operations has not been significantly curtailed by Congress. We expect that Congress will approve the remaining
fiscal year 2008 supplemental funding in a timely fashion, and, thus, we do not believe that the cost of ongoing operations in
Iraq and Afghanistan will materially impact the investment accounts in the near term.
We believe our broad mix of programs and capabilities continues to position us favorably to support the current and
future needs of the DoD. Our key aircraft programs are strongly supported in the fiscal year 2009 DoD budget request. The
request includes $4.0 billion for 20 F-22 Raptor air dominance fighter aircraft produced under a multiyear contract entered
into in 2007, and $6.7 billion for the F-35 Lightning II Joint Strike Fighter program. Funding of $933 million is proposed for
procurement of 8 C-130J aircraft, as well as advance procurement for 16 additional C-130Js. The budget also includes $798.2
million to continue upgrades of the C-5 strategic airlift aircraft.
The fiscal year 2009 budget request includes $10.5 billion, an increase of $600 million over fiscal year 2008, for missile
defense capabilities. We are represented in almost every aspect of land, sea, air and space-based missile defense, including
the AEGIS weapon system program, the Medium Extended Air Defense System (MEADS), the Patriot Advanced Capability
(PAC-3) missile program, the Terminal High Altitude Area Defense (THAAD) system, and the Multiple Kill Vehicle (MKV)
program.
In the areas of space-based intelligence and information superiority, we have leadership positions on programs such as
the TSAT Mission Operations System (TMOS), Mobile User Objective System (MUOS), the Advanced Extremely High
Frequency (AEHF) system, the Space-Based Infrared System-High (SBIRS-H) and classified programs. Space-based systems
are robustly funded in the fiscal year 2009 request at $10.7 billion.
The fiscal year 2009 budget proposes $16.4 billion for an array of command, control, communications, computers,
intelligence, surveillance, and reconnaissance (C4ISR) programs. We are well-positioned in these capabilities, including the
Air Operations Center Weapons System Integrator, the Warfighter Information Network – Tactical, the Combatant
Commanders Integrated Command and Control System, and the Global Communications Support System – Air Force.
We will continue to perform on contracts to develop and deliver essential munitions, missile, and other systems, such as
Hellfire, Guided Multiple Launch Rocket Systems, and EQ-36, to our warfighters. We are bringing our systems integration
expertise as well as our existing advanced technology products and services into adjacent military product lines, such as the
Littoral Combat Ship and the VH-71 U.S. Presidential Helicopter programs, both of which are supported in the fiscal year
2009 budget request. We are well-positioned to expand in these adjacent markets, as well as in unmanned systems
capabilities, including air, ground, and underwater systems.
We are a significant presence in information technology support and modernization for the DoD. We see opportunities
for expansion of our sustainment and logistical support activities to enhance the longevity of the systems procured by our
customers and improving global supply chain management, and we see opportunities to grow our business in providing
global services and business process management across the DoD enterprise.
Most of the aforementioned programs require funding over several annual government budget cycles. There is always
an inherent risk that these and other DoD programs could become potential targets for future reductions or elimination of
funding to pay for other programs, either in the Administration’s budget reviews or in the Congressional process of annual
appropriations.
U.S. Government – Non-Department of Defense Business
The war on terrorism has focused greater attention on the security of our homeland and the need for better
communication and interoperability among law enforcement, civil government agencies, intelligence agencies, and our
military services. Our experience in the defense arena, together with our core information technology and services expertise,
has enabled us to provide products and services to a number of government agencies, including the Departments of
Homeland Security, Justice, Commerce, Health and Human Services, State, Transportation and Energy, the U.S. Postal
Service, the Social Security Administration, the Federal Aviation Administration, the National Aeronautics and Space
Administration (NASA), the Environmental Protection Agency (EPA), and the Library of Congress.
34